Endress+Hauser weathered the 2020 pandemic year well. Despite declining sales, the company, which specialises in measurement and automation technology, maintained profitability at a high level and strengthened its financial power. The Group created new jobs and expanded its global sales and production network. CEO, Matthias Altendorf, sees Endress+Hauser as well positioned both for uncertain times and for economic recovery.
Business creates value for society
Endress+Hauser succeeded in protecting people’s health and continuing to provide solid support to customers, Altendorf explained at the annual press conference in Basel, Switzerland:“We helped to keep important areas of our daily lives running during the pandemic. Our work is important for our customers and for society. Endress+Hauser products are used, for example, to produce vaccines, while subsidiary, Analytik Jena, supplies technology to detect the coronavirus.”
Digitisation played an important role, picking up speed during the pandemic – in products, in collaboration and in internal processes. Customers have long been able to conduct everyday transactions via the Endress+Hauser website. The number of registered users on the platform doubled and online business grew by 39%. If needed, the Visual Support app brings service technicians virtually to customers’ plants. Even factory acceptance tests can now take place remotely with video support.
Nevertheless, the Group’s sales fell by 2,8% to €2,577 billion in 2020. However, this figure is heavily influenced by exchange rate developments. Apart from the Swiss Franc, all major currencies depreciated against the Euro. Without these effects, according to CFO Dr Luc Schultheiss, Endress+Hauser would have almost reached the previous year’s level in sales. “In local currencies, we are above the industry average and have performed well in the market.”
Individual regions, industries and segments developed differently. Of the three countries with the highest sales, only China achieved growth and is now Endress+Hauser’s largest single market. In Germany and the USA, on the other hand, sales declined. In contrast to process engineering, laboratory instrumentation recorded strong growth. Cyclical industries suffered in the crisis, while non-cyclical sectors were stable. “The broad backing in the market helped us,” said Altendorf.
Endress+Hauser’s profitability did not suffer last year. On the cost side, exchange rates had a positive effect in 2020, for example, on material expenses. Because many business trips and activities were cancelled, operating expenses fell, while personnel expenses grew at a below-average rate. Overall, operating profit (EBIT) decreased by 1,9% to 337.1 million euros.
“The shareholder family is pleased and proud that Endress+Hauser has come through this difficult year so well,” said Supervisory Board president Dr Klaus Endress. “The company announced at the beginning of the pandemic that it would avoid short working hours if possible and would not lay off any employees due to the crisis. There was a lot of solidarity in the company that helped us during the pandemic.”
Endress+Hauser filed patents for 276 inventions for the first time, 42 less than in 2019. For Altendorf, this demonstrates the disadvantage of working from home: “People are more creative when they inspire each other and search for solutions collaboratively. However, the Group’s innovative strength remains intact as we launched 40 new products in 2020.”
Good start to the current year
In 2021, Endress+Hauser aims to grow in the mid single-digit percentage range and the Group has started with momentum. In the first three months, incoming orders were above the company’s own targets, as well as above the still strong first quarter of 2020. “The outlook continues to be characterised by uncertainty,” emphasised Altendorf. To offset this, Endress+Hauser is therefore increasing inventories and strengthening its supplier network, while new logistics centres have been put into operation in China and Germany.”
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